Big Student Loan Change Makes It Harder to Become Doctor or Lawyer

It might soon be harder to attend medical or law school due to President Donald Trump's big spending bill.

Trump signed his "big beautiful" tax and spending bill into law on July 4, codifying a slew of changes to the tax system, healthcare, and education. The law includes a major overhaul to the country's education system, particularly to the way students take out and pay off their student loans.

One specific student-loan change in the bill places new caps on the amount of loans students can borrow for graduate school, including medical and law school. Specifically, the bill eliminates the Grad PLUS loan program, which allowed graduate and professional students to borrow up to the full cost of attendance for their programs.

It also caps borrowing for graduate students at $20,500 a year and $100,000 over a lifetime and for professional students, like those in medical or law school, at $50,000 a year and $200,000 over a lifetime.

Those caps mean many students won't be able to borrow enough to cover the full price of graduate or professional school. The Association of American Medical Colleges found that the median cost for four years of public medical school was $286,454 for the class of 2024, with that amount rising to just over $390,000 at a private school.

The average total cost of law school in the latest school year, according to the Education Data Initiative, was just over $217,000.

"Eliminating or restricting these critical programs would undermine the future physician workforce and ultimately make it harder for patients in communities nationwide to get the care they need," AAMC's president and CEO, David Skorton, said in a statement.

Sara Partridge, associate director for higher education policy at the left-leaning think tank Center for American Progress, told Business Insider that she expects these new caps to worsen doctor shortages and "shut off pathways to these important jobs for students from low income families."

The Health Resources and Services Administration — a federal agency that ensures healthcare access — said in a 2024 report that 75 million people currently live in a primary care health shortage area, and it projects a shortage of 187,130 full-time physicians in 2037.

Some students might also turn toward private student loans with higher interest rates, Partridge said.

"Private student loans often require a cosigner, so some students may not qualify, and they may have no options to fully finance and attend graduate school. So there is a possibility that for some students, this will be a barrier to accessing graduate school," Partridge said.

The parent PLUS program, which previously allowed parents to borrower up to the full cost of attendance, still exists, but the bill places a $65,000 lifetime cap on parents borrowing for their kids' educations.

Along with the borrowing caps, the spending bill also instituted significant changes to student-loan repayment. It eliminated existing income-driven repayment plans and replaced them with two new options. The first option is a standard repayment plan with a payment period ranging from 10 to 25 years, based on the borrower's original balance. The second option is a new plan called the Repayment Assistance Plan, which sets borrowers' payments at 1% to 10% of their income, and any remaining balance is forgiven after 30 years.

It's less generous than former President Joe Biden's SAVE plan, which the bill eliminated. The SAVE plan would have reduced payments on undergraduate loans from 10% to 5% of a borrower's discretionary income.

When asked for a comment on the impact of the new student-loan caps, the Department of Education directed BI to Education Secretary Linda McMahon's July 3 post on X, saying the bill "simplifies the overly complex student loan repayment system" and "reduces federal student loan borrowing amounts to help curb rising tuition costs."

"A truly beautiful bill for the American people," she said.

Is Trump's spending bill affecting your decision to pursue an advanced degree, like medical or law? Share your story with this reporter at [email protected].